Longtime Domain Registrar Tucows Buys A Small ISP, Wants To Refocus Broadband Industry On Giving A Damn About The Consumer

from the baby-steps dept

As we've been noting, Google's arrival into the broadband space has resulted in a flood of other companies proclaiming that they too will soon be offering 1 Gbps services over fiber. While some of these announcements (particularly from sluggish, larger companies like AT&T and CenturyLink) are little more than fiber to the press release (development community deployments dressed up to appear more substantive than they are), some of them are genuine, grassroots efforts to rescue the U.S. broadband industry from the clutches of our beloved cable and phone duopoly.

As a hopeful example of the latter, longtime domain registrar Tucows has announced it's jumping into the 1 Gbps fiber game under its wireless MVNO brand name, Ting. In a blog post, Ting notes it has purchased a small Charlottesville, Virginia, ISP called Blue Ridge InternetWorks (BRI). BRI, Ting claims, will be the company's beachhead in an attempt to disrupt the U.S. broadband market one small bite at a time. Ting didn't release pricing details, but told me in an e-mail it will offer symmetrical 1 Gbps speeds at a "sub-$100 price point." It also promises to make respecting consumers and net neutrality a priority:

"Tucows believes very strongly in the open Internet. Up until now, there wasn’t a whole lot we could do but educate, agitate and contribute. Getting into fixed access, owning our own pipe, is an opportunity for us to practice what we preach when it comes to the open Internet and net neutrality."

Ting says it was inspired by Google Fiber, but claims that as a smaller company Ting can deliver a more personal, human touch:

"We admire what Google is doing with and for gigabit fiber Internet access, but for the Internet giant, access is more of a side project. Also, Google is a lot of great things but human scale isn’t one of them. If a smaller, more customer-focused company player like Ting can pull off a win-win in a community like Charlottesville, it bodes really well for small towns and providers all over the country. For the record, we’re confident we can pull off just that, otherwise we wouldn’t start down the path."

While the fact that Google's "human scale" is waning (like oh, forgetting about net neutrality to court GOP lawmakers) is certainly true, it's unclear if Ting can truly disrupt on any serious scale. The company is coming off of the launch of a consumer-friendly wireless MVNO that has done some very interesting things in regards to simple, freemium pricing, though actual consumer interest has been modest so far. If most broadband industry customer satisfaction studies are any indication, there's certainly room for smaller ISPs that actually value consumer relationships, as opposed to treating their own users with disdain.

That said, the U.S broadband market certainly isn't free, and if you've paid attention over the years, we've watched an endless stream of small, consumer-friendly disruptors (does anyone remember ISPs like Speakeasy?) run face-first into a regulatory capture brick wall erected by the nation's biggest carriers. AT&T, Verizon, Time Warner Cable and Comcast have worked long and hard at writing state laws that make competing with them difficult if not impossible. If Tucow/Ting is going to enter the fray -- even on a small scale -- it's going to need oodles of cash, plenty of lawyers, and some damn good lobbyists.

Google Fiber has succeeded (if we're going to define success as three partially-constructed fiber cities) in large part because it has oodles of cash to throw at the problem. But even with Google's deep pockets, it's unlikely that Google Fiber will ever really impact more than a handful of cities. In that case, Ting's right in that if U.S. broadband competition is ever going to improve, it's certainly not going to happen via a dysfunctional Congress and timid/beholden regulators. It's going to need to be clawed out of the very earth, town by town, piecemeal, by the communities themselves.

Filed Under: broadband, charlottesville, fiber, small town isps, virgninia
Companies: blue ridge internetworks, bri, ting, tucows

Senator Ron Wyden Calls 'Baloney' On Claim That Title II Will Increase Taxes On Your Internet Bill: 'I Wrote The Law'

from the i'm-guessing-baloney-was-something-else-before-that... dept

We recently wrote about a very questionable study that argued that if the FCC does, in fact, reclassify broadband under Title II, it would lead to "$15 billion in new taxes" on your broadband bill. That number was bullshit. It conflated a bunch of different and totally unrelated things, and pretended that they were connected to reclassifying under Title II. In fact, most of the "taxes" in the report were attributed to the expiration of the Internet Tax Freedom Act (which put a moratorium on internet access taxes at the local level) which was set to expire this month(no matter what happened with the FCC). And, as part of the Cromnibus agreement, Congress agreed to extend the moratorium on taxes until late next year (when it will almost certainly be extended again). And with that, poof, almost the entire claimed $15 billion disappeared -- having absolutely nothing to do with the Title II decision.

To put an exclamation point on this, Senator Ron Wyden (also, an occasional Techdirt contributor) released one of the best statements you'll see from a politician, literally calling "baloney" on the tax claim, and noting that he wrote the damn law, so he knows what it covers -- and pointing out that the moratorium applies whether or not broadband is classified under Title II:

I wrote the Internet Tax Freedom Act. So I want to set the record straight about the false claim being peddled by opponents of net neutrality. They are saying things that aren’t true to try to stop the FCC from acting to protect the free and open Internet.

The claim: If the FCC reclassifies broadband Internet access as a “common carrier” under Title II, consumers could be stuck with new taxes by state and local governments.

In a word: Baloney.

The facts:

1. Net Neutrality is not going to invalidate the Internet Tax Freedom Act (ITFA).
   My colleagues and I knew people would try to tax the Internet if they could. So in ITFA Congress broadly defined the term “Internet access.” It is illegal to tax the internet. Under Title II or otherwise. The FCC could define the Internet as a series of tubes and ITFA would still prohibit taxes.
2. The “grandfather clause” in ITFA will not allow cities to suddenly open the Internet up to telecom taxes. If the FCC reclassifies broadband Internet, it will not change if states taxed Internet access before 1998. The FCC has broad authority, but it cannot rewrite history.

The bottom line: The Internet Tax Freedom Act will protect the Internet from taxes regardless of how the FCC defines Internet access.

The opponents of the open Internet aren’t quitting. But the good news: neither are we.

And yet, somehow, don't be surprised if this ridiculous tax myth lives on...

Filed Under: net neutrality, taxes, title ii

Hollywood's Secret War On Net Neutrality Is A Key Part Of Its Plan Stop You From Accessing Websites It Doesn't Like

from the because-anti-piracy-is-more-important-than-the-internet dept

We already wrote about the MPAA's plan to break the internet by trying to twist a portion of the DMCA to force ISPs to remove DNS entries, making sites effectively disappear off the internet. However, one key element to this actually relies on an issue closely related to the net neutrality fight -- though understanding it involves going pretty deep into both copyright law and telecommunications law.

Historically, the MPAA has been against net neutrality for a long time. Back in 2007, during the original net neutrality fight, the MPAA weighed in with an FCC filing against net neutrality, arguing that it would interfere with filtering technologies that it wanted ISPs to start using. In 2009, as the second net neutrality battle ramped up, the MPAA sent a similar filing -- with some friends arguing that net neutrality is just another word for file sharing, and would lead to "rampant looting." Given all this, the 2010 open internet rules from the FCC included a special carveout for copyright content, arguing that the rules "do not apply" to copyright infringement.

We noted, earlier this year, how ridiculous it was that the MPAA was still on the wrong side of the net neutrality debate, seeing as how it would stifle a bunch of important new developments that have vastly improved things for filmmakers. But, it appears that the MPAA didn't get the message, at all. The only message it got was to be quieter about its opposition to net neutrality. In some of the leaked emails, it's noted that the MPAA's strategy on net neutrality is to be quiet and evasive about it:

On network neutrality: Most member companies supported, in principle, a narrow, low-profile MPAA filing focused on opposition to the regulation of content.

And, indeed, that's basically what happened. On September 15th, the MPAA filed a fairly short comment that mainly focused on making sure the new rules don't create some sort of compulsory licensing scheme for content (no actual rules under consideration would do that) and that they don't interfere with copyright law. Just a few weeks ago, it appears that the MPAA and a bunch of studio execs further met with the FCC to reiterate that there should be a copyright infringement loophole in any net neutrality rules:

the FCC should adopt its tentative conclusion to cary forward language in its previous network neutrality provisions making clear that the rules do not prevent content companies and ISPs from combating piracy...

That's all to be expected. But there's something much more nefarious going on, which came out in the leaked document [pdf] we discussed earlier about pretending that the DMCA requires DNS-level takedowns. We were a bit confused, initially, by TorrentFreak's recent mention of the MPAA exploring the use of the Communications Act, but the full leak of the document makes that much clearer.

It's not that the MPAA is looking to use the Communications Act against ISPs, but rather, the plan is to think about using the ISPs' own arguments against net neutrality as a wedge to force them into site blocking. To understand how this works, you have to go back nearly a decade to to the Supreme Court's ruling in the Brand X case (which, coincidentally, came out the same day as the Grokster ruling). This was the case in which the Supreme Court upheld the FCC's decision to say that cable internet providers could be classified under Title I as an "information service" rather than a "telecommunications service" (under Title II).

Obviously, that's the key fight that we're in today -- to see whether the FCC can go "reclassify" internet (for both cable and DSL) away from Title I and back to Title II. Here's why this matters in the copyright context: as we mentioned in our earlier post, "notice and takedown" provisions in the DMCA do not apply to "transitory digital network communications" under 512(a) of the DMCA. In plain language, this means that copyright holders can't send takedown notices or append liability to a network provider just because some infringing content traversed its network. That makes sense. Without that, networks would have to do deep packet inspection and try to spy on basically all traffic.

But... part of the reason why broadband companies won the Brand X case was by arguing that they're a lot more than just a network "telecommunications" service -- and that's because (they argued) they provide a lot more -- including DNS services. And, thus, the MPAA argues, under the Brand X ruling, broadband providers are effectively admitting that DNS services are not covered by the DMCA's 512(a) and thus may be covered by 512(d) ("information location tools") which are subject to notice and takedown rules. Here's the MPAA explanation:

ISPs successfully advocated before the FCC, and then at the U.S. Supreme Court..., that broadband service does not constitute a “telecommunications service” within the definition of 47 U.S.C. 153(53) because broadband ISPs offer functionalities such as email and DNS, which are not “telecommunications.”.....

Because ISPs offer an intertwined service package that includes both telecommunications and information services, the FCC held in Cable Modem Declaratory Ruling, and the Supreme Court affirmed in Brand X, that retail ISP service from a last-mile provider is not an “offering” of telecommunications to the public within the meaning of the “telecommunications service” definition, because the “offering” includes both telecommunications and information services blended into the same service.

From there, the MPAA notes that the definition of a "service provider" is very similar under both the Communications Act and the DMCA -- meaning that there's a "colorable" argument, that since broadband providers have convinced the FCC and the courts that they're not telecommunications services under the Communications Act it should also mean that they're not a "transitory digital network communications service provider" under the DMCA:

...both statutory definitions are essentially identical (and the legislative history shows an intent to make them identical), and, having successfully advocated for and obtained a holding from the FCC that they do not provide “telecommunications services” for purposes of the Communications Act, ISPs should not then be allowed to turn around and claim that they are “service providers” for purposes of the DMCA. One might further contend that any specific ISPs that litigated the Brand X case or its progeny should be estopped from taking a contrary position under the DMCA.

In short, because these ISPs got classified as information services rather than as telco services by the FCC (and the Supreme Court said that was okay), they can't then argue that they are telco services for the DMCA protections.

Given that, if the FCC were to reclassify broadband back under Title II, this leg of the MPAA's argument would essentially evaporate. Because it would confirm, absolutely, that broadband providers are telco service providers, and thus clearly protected by the DMCA under 512(a). Thus, for the whole "notice and takedown at the DNS level" plan to be most likely to succeed, the MPAA really needs broadband to remain classified under Title I, so that it can rely on the argument that DNS services are not part of being a telecommunications service, but rather should be classified as a "information location tool" subject to notice and takedown.

I recognize that this may be confusing to follow -- though I've tried to lay out the specifics from both copyright and telco law in a way that's clear. The short version of this is simply that a key part of the MPAA's "site blocking by DNS" plan, actually relies on the fact that broadband providers are not, currently, classified as telco services under Title II. If that changes, it takes away a big part of the MPAA's legal argument. Personally, I think the MPAA's argument, even if broadband is classified under Title I, is incredibly weak already, but having the FCC reclassify broadband providers back under Title II would make the MPAA's attempt to break the internet that much harder, even with the loophole language concerning copyright infringement.

And, of course, all this goes to show just how far former Senator, now MPAA boss, Chris Dodd has gone in selling his soul to Hollywood. Back when he was in Congress, he was a big supporter of net neutrality. Apparently, being principled doesn't pay as good.

Filed Under: copyright, dmca, dns, fcc, information service, net neutrality, open internet, telecommunications service, title ii
Companies: mpaa

Bizarre Fight Commences Over Who 'Won' Latest Net Neutrality Comment Round

from the doesn't-matter dept

Back in October, we pointed out the pointlessness of focusing on who sent more comments to the FCC over net neutrality, as there appeared to be a whole lot of astroturfing and misleading tactics being used to ratchet up the counts. That didn't mean that the commenting and looking at the information wasn't useful -- it is -- but there was little value in a purely "numbers" based focus on how many comments were filed from those "for" or "against." With so many coming from various online forms, the weight they would have on the final FCC decision is about as close to nil as possible.

However... an interesting sort of fight has broken out about all of this. The Sunlight Foundation released an analysis this week of the second round of FCC comments on net neutrality (technically these are supposed to be "in response" to the first round, but they were basically just another chance to say the same things all over again. The Sunlight Foundation noted that this time, an anti-net neutrality group (the same one we discussed as our example of totally misleading crap being pushed in the FCC's direction) apparently convinced many hundreds of thousands of people to send in one of its incredibly misleading comments, all of which will be promptly ignored. The Sunlight Foundation's analysis claimed that the majority of the comments in round two came from this group, American Commitment, which completely incorrectly told people that net neutrality was about a "left-wing extremist..." "takeover of the internet." Which, frankly, is bullshit. You can disagree with net neutrality without lying, but American Commitment didn't seem to be able to do that. Still, its lies certainly did convince lots of people to click "send" on its outrage-o-matic machine.

American Commitment then took the Sunlight Foundation's announcement and literally declared itself the winner of who filed the most comments. Except... not only were there clear limitations in the data, which the Sunlight Foundation got from the FCC's public release, many on the pro-net neutrality side started pointing out that the numbers are clearly incorrect. They know how many letters were sent from their side -- and the numbers from the FCC's release (which Sunlight used) appeared to vastly undercount the actual filings.

Fight for the Future then dug into the data itself and argued that the FCC and Sunlight Foundation screwed up in counting the comments, "dropping at least 244,881 pro-net neutrality comments." The Sunlight Foundation shot back that it thinks Fight for the Future made its own mistakes in the data analysis.

Finally, I've spoken to multiple people inside the FCC who are now admitting that something clearly went wrong with the data that it released -- so it's going back and doing a recount itself. We should know more on the results soon, but it sounds like there's a good chance that the original data that Sunlight relied on may have had some problems.

There are two big takeaways from this, neither of which are really related to all the sniping going on:

1. The exact count still doesn't fucking matter. This isn't a popularity contest. It's about doing what's right for the future of the internet and the American public who uses it.
2. The FCC's technology needs a massive upgrade. The technology that the FCC uses to bring in these comments is decades old and is simply not designed (at all) for this level of public participation. And the problem there is Congress, which refuses to allocate any budget at all to the FCC to improve its own computer systems. This was part of the reason why the whole system went down during the first comment period. And no matter what you think of the FCC, at the very least we should be able to agree that better transparency and openness is important, and to do that, the FCC should have computer systems that were at least built in the modern era.

Other than that, this whole numbers game of who hit the outrage-o-matic button harder seems like a distraction from the main point: the future of the internet.

Filed Under: comments, fcc, net neutrality, transparency
Companies: american commitment, fight for the future, sunlight foundation

Netflix Patiently Explains To FCC Commissioner Pai That CDNs Are Perfectly Normal, Not Diabolical 'Fast Lanes'

from the please-take-my-faux-outrage-seriously dept

We've been noting lately how a concerted effort is afoot by big broadband ISPs, their think tanks, and some sector analysts to vilify Netflix because of the company's outspoken positions on usage caps, broadband competition and most recently interconnection and Title II. As such, you might have noticed the media has seen a noted spike in studies, reports and analysis declaring that ISPs are simply misunderstood. These studies will all inform you that if you look at the data in just the right way -- you'll realize that Netflix is a really bad guy and a dirty freeloader -- and it's Comcast, Verizon and AT&T that really have your best interests at heart.

This new push to discredit Netflix culminated recently with a bizarre letter (pdf) sent to Netflix by FCC Commissioner Ajit Pai. In the letter, Pai proclaims he was "surprised to learn" that Netflix was being hypocritical and nefarious on net neutrality because it: (a) refused to join a new streaming video coalition spearheaded by Comcast and Netflix critics; and (b) operates a content delivery network (CDN). As we noted at the time, both allegations are more than a little stupid. Pai's allegations that Netflix's Open Connect CDN constitutes an unfair "fast lane" was particularly silly, since CDNs benefit consumers, ISPs and content companies alike.

In a response letter to Pai (pdf) sent last week, Netflix has to carefully spell out how the company's free and entirely voluntary CDN, like all CDNs, caches content on the inside edge of the ISP network, making content delivery more efficient for everybody involved:

"Open Connect is not a fast lane. Open Connect does not prioritize Netflix data. Open Connect uses 'best efforts' Internet services into and out of its content caches. When an ISP asks Netflix to localize an Open Connect cache within its network, it does not disadvantage other Internet content. To the contrary, Open Connect helps ISPs reduce costs and better manage congestion, which results in a better Internet experience for all end users. Only ISPs can speed up or slow down data that flow over their last mile. When Netflix directly interconnects with an ISP, Netflix data does not travel faster than other Internet content—unless an ISP is artificially constraining capacity to other data sources."

This will, of course, result in the usual complaints about how government employees don't understand tech, but as a former regulatory lawyer for Verizon, Pai knows full well what a CDN is and that it doesn't violate neutrality. He's just apparently helping the industry's Netflix vilification effort, and feeding the partisan neutrality grist mill some calorie-free angst nuggets. Again, none of this is to say that Netflix doesn't do stupid things, but recent efforts to demonize Netflix by an industry with thirty years of anti-competitive behavior under its belt are getting more than a little obnoxious.

Filed Under: aji pai, cdn, content delivery network, fast lane, fast lanes, fcc, net neutrality, open internet
Companies: netflix

GAO Study: Broadband Usage Caps Can Hinder Innovation, The FCC Might Want To Actually Pay Attention

from the gosh-you-don't-say dept

For years incumbent ISPs have abused limited market competition to impose usage caps on fixed-line connections, then sock customers with per gigabyte overages. These slowly-expanding usage caps are usually imposed under the pretense that the ISPs are just ultra worried about fairness and managing the congestion bogeyman. After years of pretense, even the carriers a few years back finally acknowledged that usage caps aren't really about congestion. They're price hikes in a dress, and they're designed specifically to protect legacy TV revenues from the rise of Internet video.

Meanwhile, while ISPs want to bill and meter like utilities, they repeatedly demand that it's unAmerican to regulate them like utilities (as we've seen repeatedly during the Title II fracas). The result so far has been usage meters that often don't work, in some cases resulting in customers being billed while the modem is off or the power is out. Regulators for a decade have napped on this issue, at most acting as if this is just a wonderful example of creative industry pricing.

We've spent many years talking about how usage caps can easily hinder innovation and often just wind up confusing consumers (quite intentionally). Fast forward to 2014 and a new GAO study this week posits that hey, usage caps (and usage-based pricing, UBP) can hinder innovation and may confuse customers:

"According to the literature, providers facing limited competition could use UBP to increase profits, potentially resulting in negative effects, including increased prices, reductions in content accessed, and increased threats to network security. Several researchers and stakeholders GAO interviewed said that UBP could reduce innovation for applications and content if consumers ration their data. While FCC is collecting data regarding fixed UBP, it is not using this data to track UBP use because it only recently started collecting the data specifically to analyze prices. As a result, although FCC is charged with promoting the public interest, it may not know if UBP is being used in a way that is contrary to the public interest and, if so, take appropriate actions."

In other words, the FCC is behind the game when it comes to tracking usage cap data, and therefore couldn't be bothered to study the negative impact of usage caps. The GAO noted that "better communication is warranted" on the issue and that the fixed-line broadband industry should develop a "voluntary code of conduct" to make sure consumers understand what they're buying. While that's all well and good, it doesn't address the failure of regulators to track meter accuracy, nor does it really address the fact that usage caps are by and large (like neutrality violations) the byproduct of uncompetitive markets.

Historically cable and phone companies have argued that they should be free to engage in pricing experimentation, and that straight usage-based billing plans could potentially benefit consumers. The GAO agrees, noting that plans where users only pay for what they use would certainly be ok:

"The literature also suggests that providers could implement UBP to benefit consumers—for example, by offering low-data, low-cost plans for those who do not want an unlimited data plan. While mobile providers GAO reviewed offer such plans, fixed providers—generally facing less competition—do so to a lesser extent."

Odd, that. Obviously the problem is that while carriers pay lip service to usage-based plans that offer value, with no competition this never actually comes to fruition. What we wind up seeing are plans that simply take existing flat-rate unlimited pricing, with overage fees layered on top. In a few instances users will get a tiny discount in exchange for giving up the freedom of unlimited data. For example, Time Warner Cable (who took an absolute PR beating in 2009 and had to retreat from mandatory caps) now offers users a $5 discount if they replace unlimited consumption with a $5 usage cap. Feeling the value yet?

Caps have been a particular worry as Comcast (who is slowly expanding usage cap trials in its least competitive Southern markets) is poised to soon control 40% of the U.S. broadband market after it acquires Time Warner Cable. With AT&T and Verizon backing out of many unwanted DSL markets, cable's going to enjoy a stronger monopoly in many areas over the next decade than ever before. One guess what kind of "creative" pricing plans will be the end result?

Filed Under: broadband, fcc, gao, innovation, usage caps

Verizon Admits To Investors That Title II Won't Harm Broadband Investment At All

from the words-are-but-wind dept

As the company that sued to overturn the FCC's wimpier net neutrality rules (to the chagrin of AT&T and Comcast, who liked the weaker rules), Verizon has of course been leading the charge against Title II, telling anyone who will listen that network investment will decline, innovation will stall, dogs and cats will live together, and mass hysteria will ensue if the FCC regulates ISPs under Title II. Of course you're to ignore the fact that the voice component of wireless networks and parts of Verizon's FiOS network (largely to get tax breaks) have been regulated for years under Title II without the slightest problem for the company.

Given Verizon's repeated assertions that Title II will just crush investment, it was a little amusing to hear Verizon CFO Fran Shammo this week clearly tell attendees of the UBS Annual Global Media and Communications Conference that Title II won't harm the company's network investments in the slightest. Shammo was asked about whether Title II would sour Verizon's interest in investing in United States broadband. Shammo's reply:

"I mean to be real clear, I mean this does not influence the way we invest. I mean we're going to continue to invest in our networks and our platforms, both in Wireless and Wireline FiOS and where we need to. So nothing will influence that. I mean if you think about it, look, I mean we were born out of a highly regulated company, so we know how this operates."

Companies (especially CFOs) tend to forget that the public has ears when speaking at these sort of events, but apparently Shammo quickly realized what he had just admitted -- so he then tries to backtrack:

"And I also think that if you look at other countries who have done this, it kind of leads you down to [a] path of total failure because it really, really slows down investment and slows down innovation."

Right. Clear as mud. Title II won't impact network investment whatsoever, but Title II will like totally impact network investment. Verizon pretty clearly wants to have its cake and eat it too, even if it makes absolutely no logical, coherent sense. Of course that's because the mega-ISPs aren't really that worried about Title II -- they're worried that the FCC will create enforceable rules that will prevent them from abusing the industry's stranglehold on uncompetitive broadband markets with all manner of "creative" pricing and content/service discrimination.

Filed Under: fran shammo, investment, net neutrality, title ii
Companies: verizon